Updated September 4, 2026. Quick answer. For 2026, a child’s first $1,350 of unearned income (interest, dividends, capital gains) is tax-free, the next $1,350 is taxed at the child’s own rate, and unearned income above the combined $2,700 is taxed at the parent’s marginal rate under the “kiddie tax.” Both figures are unchanged from 2025; inflation didn’t clear the next $50 rounding increment this year. The 2027 figures are not yet announced, and no named forecaster has published a projection.
What’s actually settled, vs. still open
Settled for 2026 (Revenue Procedure 2025-32, §4.02, quoted directly): “For taxable years beginning in 2026, the amount in §1(g)(4)(A)(ii)(I)…is $1,350. This $1,350 amount is the same as the amount provided in §63(c)(5)(A), as adjusted for inflation.” The parental-election test under §1(g)(7) applies when a child’s gross income is more than $1,350 but less than $13,500 (ten times the base amount).
Open: the 2027 thresholds. 26 U.S.C. §1(g) defines the kiddie-tax mechanism itself; the dollar figure is actually set by §63(c)(5)(A), the dependent’s standard-deduction floor, cross-referenced into the kiddie-tax statute, indexed via the standard §1(f) chained-CPI adjustment, unaffected by OBBBA.
Where this sits in your own return
A published figure is a fixed point; how it lands depends on the rest of your income, your accounts and your timing, and an adviser can look at those together with you.
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The numbers, year by year
| Year | Tax-free / child’s-rate base | Parent’s-rate threshold |
|---|---|---|
| 2023 | $1,250 | $2,500 |
| 2024 | $1,300 | $2,600 |
| 2025 | $1,350 | $2,700 |
| 2026 | $1,350 (unchanged) | $2,700 (unchanged) |
| 2027 | not yet announced | not yet announced |
The figure is borrowed, not original
The kiddie-tax dollar amount isn’t set by its own dedicated indexing formula; it’s defined as equal to the dependent’s standard-deduction floor under §63(c)(5)(A), a figure that also governs how much a dependent can earn before owing any tax at all. That’s a useful cross-check: if you ever see a “2027 dependent standard deduction” figure from a reliable source before this page updates, the kiddie-tax base amount will match it exactly.
Sources
2026 figure: IRS Revenue Procedure 2025-32, §4.02, published 2025-10-09, read at irs.gov/pub/irs-drop/rp-25-32.pdf on 2026-09-04. Statute: 26 U.S.C. §1(g), §63(c)(5)(A), read at uscode.house.gov on 2026-09-04. No 2027 figure or forecaster projection was found as of this date.
This page is updated the day the official figure is announced, and any projection above will be struck through rather than deleted, so the record of what was projected vs. what actually happened stays visible. See the 2027 numbers hub for every figure this program tracks, projected vs. official. General information, not tax or legal advice.